LIVERMORE — Livermore residents will soon be allowed to legally sell baked goods and other nonperishable items from their homes as the city finalizes an ordinance conforming to a state law legalizing cottage food industries.

Backed by a groundswell of support from cities like Berkeley and Oakland, the state legislature approved AB 1616 — the so-called Cottage Food Act — last September, declaring Cottage Food Operations (CFOs) as valid residential uses starting Jan. 1, 2013.

The law requires producers to obtain permits from county health agencies and sell only foods considered “low-risk” — such as baked goods, candy, dried fruit and granola. Producers are also limited to annual gross revenues of no more than $35,000 in 2013, $45,000 in 2014 and $50,000 in 2015 and beyond.

Since the law took effect, cities across California have been gradually incorporating it into their permitting standards. Livermore became the latest on Aug. 20, when the Planning Commission approved cottage food businesses as recognized for residential permits, allowing permit holders to make and sell homemade goods from their residences. According to Livermore Planning Manager Paul Spence, the “home occupation permits” would cost $90 and be valid for three years.

“It does provide and expand opportunities for home-based businesses,” Spence said. “We’ve tried to control the impacts associated with traffic or other activities. … We think the provisions will strike a balance.”

The licenses would have stipulations, Spence said, including limiting the number of customers to three in a home, holding producers to standard business hours and banning outdoor sales. Revenue limits would be identified through tax records, Spence said.

Each cottage food producer must first obtain a permit from the county. Alameda County began offering them in January, according to Environmental Health Department Director Jackie Greenwood, and dozens have been issued so far. For Class A permits, which allow only direct sales to customers, applicants need to pay a consultation fee of $162. Class B permits, allowing direct and indirect sales to retail stores and restaurants, require a $233 fee and an annual home inspection. All applicants are required to complete food handling and safety classes.

“(The applicants) are very savvy and organized,” Greenwood said. “They’re excited at the prospect of having their own business, not going into debt to have the business, and being creative.”

Environmental health departments across the state initially lobbied against the bill, worried about the potential risk for foodborne illnesses.

“There’s a bit of concern,” Greenwood said. “As long as the public knows it’s made in a residential home, I don’t think there’s a problem with it, because it’s (the consumer’s) right to choose.”

But even if state law permits cottage foods at farmers’ markets, they won’t be welcome in Livermore, according to Jorge Vega, a regional manager for the Pacific Coast Farmers’ Markets Association, operators of the Livermore Farmers’ Market and others in the East Bay.

“Food has to be prepared in commercial kitchens,” Vega said. “That’s just a way to ensure our customers are getting the highest quality and cleanest product.”

However, Vega said, the PCFMA’s board is planning to include the Cottage Foods Act for 2014, allowing only farmers to sell homemade products like jams or pies from the food they grow.

Livermore is still in the process of working out details of its cottage foods ordinance. The issue will head to the City Council for discussion and approval on Sept. 23.